Our sector maps are snapshots of emerging technology sectors. They show what the different categories in a sector are and how many startups are within each category. They also present a small sampling of the current startups that are innovating in each category.
Last week, we kicked off our sector map update with Part 1. You can read that blog post here.
This post is the second of a two-part series. Below you will find sector maps for Artificial Intelligence, Internet of Things, Marketing Technology, Real Estate Technology, Retail Technology, Security Technology, Transportation Technology, and Virtual Reality.
The Marketing Technology (martech) sector has seen a lot of venture capital funding over the past few years. How have its funding trends evolved over time? On our martech research platform, we have analyzed the data through 2017 and can conclude that the investments in martech have become fewer in frequency but larger in amount.
We have come to this conclusion from the following three takeaways:
Martech funding amounts are on a general upward trend at the annual level
Martech funding event counts have seen a decline in recent years
Martech average funding event size has been growing consistently
We will illustrate these takeaways with a series of graphics to show the trend of martech investments over time.
Martech Funding Amounts on Upward Trend Annually
We will start off by examining the martech funding trends over the years stacked by quarter.
This graph illustrates that martech funding is on a stable upward trend at the annual level. Specifically, the CAGR in funding amounts from 2012 to 2017 is 19%.
We have seen that martech funding is steadily growing, but what about the total number of deals?
Martech Funding Event Count Declining in Recent Years
The following graph shows us the annual number of martech startup funding deals, stacked by quarters.
The above graphic illustrates that the number of martech funding events saw a healthy upward trend from 2011 to 2014 and declined thereafter. In fact, the CAGR in funding events from 2012 to 2017 is -5%, and the number of events in 2017 is 88% of that in 2016.
We have seen that martech funding amounts are increasing steadily but its funding events are seeing a decline. Let’s see if the trend in average deal size sheds any further insight.
Average Martech Funding Deal Size Growing Over Time
The following graph shows the average funding deal size in Marketing Technology over different quarters from 2011 to 2017, as well as the trendline.
This graphic does indicate that the average martech funding deal size has experienced steady growth over the past few years. The trendline shows that from Q3 2011 to Q4 2017 the average deal size has grown by approximately 500%. This stable upward trend in average deal size demonstrates that the investments in Marketing Technology have indeed become weightier over time.
Conclusion: Investments in Marketing Technology Are Increasing in Importance
In summary, we have seen from the above graphics that martech funding amounts are on a general upward trend at the annual level, yet its event counts have seen a decline in recent years. Moreover, the average funding deal size has been growing consistently over time. These takeaways lead us to conclude that the investment rounds in martech have become more substantial–in that the bets have become fewer but larger over time. It’ll be interesting to see if this trend continues in 2018.
What are your thoughts on this? Let us know in the comments section below.
The following graph shows average and median age in the Marketing Technology sector. The graphic includes data through May 2017.
The above graph summarizes the average and median age of companies in each Marketing Technology category. The SEM (Search Engine Marketing) category has both the highest average and median ages, at around 11 years each. Other mature categories include Marketing Automation, Email Marketing, and SEO (Search Engine Optimization). Influencer Marketing and Social Discovery are the youngest Marketing Technology categories with an average age of around 6 years each.
We are currently tracking 1704 Marketing Technology companies in 15 categories across 60 countries, with a total of $29.9B in funding. Click here to learn more about the full Marketing Technology market report.
The following graph shows the founding year distribution in the Marketing Technology sector. The graphic includes data through May 2017.
The above graph summarizes the number of Marketing Technology companies founded in a certain year. 2012 ranks at the top with around 208 companies founded in that year alone. 2011 is the runner-up with 191 companies founded in that year.
We are currently tracking 1691 Marketing Technology companies in 15 categories across 59 countries, with a total of $29.4 Billion in funding. Click here to learn more about the full Marketing Technology market report.
The following two graphs summarize the rounds of funding going into the Marketing Technology space. Please note these graphics are made using data through May 2017.
The graph above shows the total amount of VC funding broken out by round. From 2006 to 2015, we saw a general increase in the overall sector funding, with the total amount peaking in 2015. With the exception of Seed funding, all other rounds of funding saw approximately equal amounts during these years. After 2015 the overall sector funding saw a sharp decline.
The graph above shows the total count of funding events broken out by round. From 2006 to 2013 we’ve seen a steep upward trend that peaked in 2013, dipped slightly in 2014, and then declined sharply after 2014. Earlier stage funding such as Seed, Series A, and Series B events make up the majority of funding event counts.
We are currently tracking 1676 Marketing Technology companies in 15 categories across 58 countries, with a total of $29.2 Billion in funding. Click here to learn more about the full Marketing Technology market report.